NEW YORK News that CVS Caremark is conducting a pilot of a specialty pharmacy program in Florida not only speaks to the importance of the fastest-growing segment in pharmacy, but also provides a glimpse into the future of how the traditional drug store can participate in the brave new world of specialty pharmacy.
“It’s about access and it’s about ease and it’s about low cost, so you have a situation where typically you’d have to call to make sure someone was home as we’re deliver this medication because of the storage requirements, etc. Now they can pick it up in the store,” Tom Ryan, chairman, president and CEO, told analysts during the company’s May 5th first quarter conference call when asked about the growth of specialty pharmacy and new initiatives. Ryan noted that, overall, he expects specialty to grow in the 14% range.
He’s not the only one bullish on specialty, to be sure. While overall pharmaceutical growth has slowed considerably, the specialty pharmacy segment continues to explode. In March at the Armada Specialty Pharmacy Summit in Las Vegas, keynote speaker Stan Blaylock, Walgreens SVP and president of the company’s managed division, Walgreens Health Initiatives, told attendees that the market could top $500 billion in the next 15 to 20 years. The market currently stands at about $70 billion to $80 billion.
But, operating a specialty pharmacy business in a typical community pharmacy setting is extremely tricky for several reasons including, but certainly not limited to, the cost of inventories and the high-touch patient requirements involved. The hub-and-spoke model that CVS is piloting is a glimpse into the future in terms of how the average corner drug store might be able to participate in specialty pharmacy. This participation could manifest as a central-fill type model — such as what CVS is employing where it will leverage its CarePlus stores and its resources in Caremark, which together represent an industry-leading $10 billion-specialty business, to fill specialty prescriptions in all of its Florida stores — or through some outside network, such as the one operated by Armada Health Care.